February 02, 2009

Blodget's synthesis: an evolutionary view of online news brands and business models

Henry Blodget’s re-emergence (and at least partial
redemption from his role in the previous era of Wall Street scandals) as co-founder,
CEO and editor-in-chief of Silicon Alley Insider,
and specifically his second-day keynote, provided a reasonably compelling
vision of where business models for online news are really headed. He began by describing the characteristics of
the new model of online journalism: aggregation of many other, primary news
sources; high velocity production (e.g. broadcast text to Blackberries); a
conversational, interactive approach; “snackable” editorial packaging; and
omni-media formats (e.g. Gawker.com runs 8 Tivos constantly to capture any
video that may prove useful).

As examples of “who is doing well” he included his own
enterprise (whose flagship is in the process of being re-branded as “Business
Insider”), claimed to be the fastest growing business site on the Web,
currently with 2 million monthly visitors; the Huffington Post, now bigger online
than bostonpost.com with almost 5 million visitors monthly; and Gawker.com,
driving twice the online traffic of the LA Times, using 80 editorial staff in
comparison to 700. He also praised the
Wall Street Journal’s hybrid subscription / free model (similar to the FT’s)
and its diversification into ad-supported business news with the successful
Marketwatch.com acquisition of a few years ago.

Blodget’s formula for saving the New York Times: cut costs
40% (no matter what, online revenues won’t cover the print cost structure, and
print revenues are disappearing fast); raise the print price; charge online subscription
fees; and, in so doing, buy time for the transition to online-only. Calling the journalism-is-dying meme “self-serving
nonsense,” he noted that the Internet has created more journalists, and that “1
billion online readers = 1 billion fact checkers.” Predictions: more newspapers will be sold,
folded, and bankrupted [a pretty safe call]; online journalism will become more
professionalized; some “old media” journalists will adapt successfully [others
clearly not]; “creative destruction” leads to a new and better future.

In response to an audience question from former WSJ
publisher (and Blodget investor) Gordon Crovitz, Blodget noted that Business Insider was already starting to
achieve the market-moving “scoops” that print brands have long dominated: “as
people understand that we will treat them fairly, we are getting more and more
contacts from people who want to talk.”

I recently decided to make a simple movie about this, I would be appreciative if you could possibly take a second to watch it and perhaps leave a comment about what you think, I left the video url in the "website" field, hopefully you can access it, thanks greatly